Correlation Between Boston Partners and Thrivent Municipal

Can any of the company-specific risk be diversified away by investing in both Boston Partners and Thrivent Municipal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Boston Partners and Thrivent Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boston Partners Small and Thrivent Municipal Bond, you can compare the effects of market volatilities on Boston Partners and Thrivent Municipal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Boston Partners with a short position of Thrivent Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Thrivent Municipal.

Diversification Opportunities for Boston Partners and Thrivent Municipal

0.71

Correlation Coefficient

Boston Partners  Thrivent Municipal

Poor diversification

The 3 months correlation between Boston and THRIVENT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Thrivent Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Municipal Bond and Boston Partners is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Boston Partners Small are associated (or correlated) with Thrivent Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Municipal Bond has no effect on the direction of Boston Partners i.e., Boston Partners and Thrivent Municipal go up and down completely randomly.

Pair Corralation between Boston Partners and Thrivent Municipal

Assuming the 90 days horizon Boston Partners Small is expected to under-perform the Thrivent Municipal. In addition to that, Boston Partners is 6.91 times more volatile than Thrivent Municipal Bond. It trades about -0.17 of its total potential returns per unit of risk. Thrivent Municipal Bond is currently generating about -0.06 per unit of volatility. If you would invest  1,036  in Thrivent Municipal Bond on December 1, 2024 and sell it today you would lose (10.00) from holding Thrivent Municipal Bond or give up 0.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Boston Partners Small  vs.  Thrivent Municipal Bond

Boston Partners Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boston Partners Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Thrivent Municipal Bond

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thrivent Municipal Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Thrivent Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boston Partners and Thrivent Municipal

The main advantage of trading using opposite Boston Partners and Thrivent Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Thrivent Municipal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Thrivent Municipal will offset losses from the drop in Thrivent Municipal's long position.

The idea behind Boston Partners Small and Thrivent Municipal Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.